Cash incentives aren't enough to lift fertility

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A growing number of nations, seeking to replace aging work forces and retain their national identities, are paying people to become parents. But the cash incentives to spawn new citizens may already be too late.

Low fertility rates, combined with population booms in poorer nations, are prompting wealthy nations to open their doors to a flood of immigrants, according to an annual report from the Population Reference Bureau, a 75-year-old nonprofit foundation that collects global demographic data. Much of the pressure to relax immigration restrictions is coming from private businesses, which fear labor shortages.

In the past year or so, dozens of industrialized nations have introduced or beefed up economic incentives -- ranging from cash bonuses to tax breaks to extended maternity leaves -- to get people to have children. Just since March, 16 countries, ranging from Bulgaria to Taiwan, have increased incentives. Germany is expected to raise its fertility incentives soon. Japan has been weighing the idea for 10 years.

"All low-fertility countries are looking at this," said Carl Haub, senior demographer for the Washington-based population bureau. "But some of these countries are going to be forced to bring in immigrants. For many, it's too late to increase fertility."

Fertility rates have been on the decline in industrialized nations for decades, but they are now becoming a serious economic problem, felt around the globe, from the European Union to China, Japan and South Korea. Uganda's population is on track to triple to 150 million by 2050, while Germany's numbers are projected to decline to 75 million from 82 million during the same period, according to the report.

A birthrate of 2.1 children per female is considered optimal for replacing an aging work force. The U.S. has a fertility rate of two children per female and is one of a few industrialized nations with a rate that high, something analysts attribute to higher fertility rates among immigrants, particularly among Hispanics.

The German Bundestag currently is considering reforms designed to make it economically easier for women to bear children. Under the proposed measures, backed by Chancellor Angela Merkel, the government would pay women 67 percent of their salaries, with a ceiling of 18,000 euros, or about $23,000, for a 12-month parental leave. Men are eligible for a two-month stipend, for a total of 14 months per couple.

Results of such incentives have been mixed. In 2004, Australia began offering bonuses to people who had babies, increasing the bounty to about $3,000 this year. The government has credited that bonus with pushing the average number of births per female to 1.82 from 1.76.

Japan, on the other hand, has been extending maternity leaves and other incentives only incrementally, and its fertility rate has continued to decline, hitting a post-World War II low of 1.3 births per female.

The thinning populace prompted Prime Minister Junichiro Koizumi in January to invoke the Japanese calendar to persuade people to procreate. "It is the Year of the Dog. Dogs have lots of offspring, and I hear they have an easy time giving birth," Mr. Koizumi said at his first news conference of the year.

France's fertility rate has risen steadily through increasingly generous tax exemptions for parents with children. Its 1.9 fertility rate far outpaces that of other European Union countries.

Anti-immigration laws around the world -- passed in the decade following the Cold War, when the 1991 collapse of the Soviet sphere opened borders world-wide -- are being eased, notes Mr. Haub, the demographer. Singapore, Spain, Portugal, Greece and Finland have recently relaxed immigration laws in response to declining population. Britain is actively recruiting Poles, and Russia has made the dubious offer to Indians to settle Siberia.

"That's going to change the nature of a lot of countries. Japan will not be as Japanese and Germany will not be as German," said Mr. Haub.

Businesses are driving both the increases in fertility incentives and the push for selective immigration. South Korea, which has a fertility rate of 1.1, is blaming worker shortages for a decline in new manufacturers, reporting a 26 percent plunge in manufacturing start-ups in June compared with the previous year.

In Japan, Sony Corp. executives recently called for more immigration. In 2004 the president of the German firm ZDH, or Central Handicrafts Association, called on the government to promote immigration of skilled workers.

In the U.S., hospitals have been trying to alleviate a chronic shortage of nurses by recruiting nurses in Jamaica, where a labor dispute over wage increases has proved intractable.

"There is a growing interest among governments, civil society, the private sector and others to capitalize on the benefits and minimize the negative consequences of migration," a United Nations population report said in March.